US Data Pushes the USD Higher [Video]

The dollar stood firm on Wednesday morning after a set of “upbeat” U.S. Retail Sales data. Experts are in disagreement as to whether yesterday’s data was really that positive or whether it hinted to slowing growth for the US economy.  In any case, yesterday’s US retail sales data coupled with very thin volumes presently on the US stock markets have pushed the 3 major US indices a bit lower but not at all too much.

It seems however that the present state of things puts the Fed rather in a position to proceed with an insurance rate cut which would actually not be the beginning of an easing cycle as markets would hope. This fading hope of a very accommodative Fed is currently pricing the USD higher.

 

Trump Spreads New Trade Concerns 

Today, US indices futures point to a muted open after US President Donald Trump made some rather concerning comments regarding the progress of the US/China trade talks. European bourses also started the day on a bearish note after Trump reignited fears over trade. Specifically, the DAX is rangebound but interestingly remained more positive yesterday despite a weak ZEW, which makes for a possibly interesting selling opportunity.

 

Forex Preview: Dollar Overbought

The dollar remains overbought, boosted by upbeat U.S. data. A weak EUR and an ailing GBP continue to be a no match against the greenback. The EUR, in particular, is at risk of falling a lot further with the EUR/USD currently being very close to breaking the key 1.12 support. Elsewhere, the New Zealand Dollar pushed considerably higher after an upbeat New Zealand CPI. Today the NZD continued to push higher supported by yesterday’s data and a mild recovery in oil prices.

 

Gold Could Push Higher

Gold prices edged lower on Wednesday, as the dollar firmed, while hopes of an interest rate cut by the Federal Reserve and global trade uncertainties kept a lid on declines. XAU/USD still held above the $1,400 level and given the apparent risk-off mood of today’s markets it could strike back up as soon as stock markets show more weakness. 

 

 

Oil Recovers, BTC Dips

Elsewhere, oil prices rose after recording steep falls in the previous session. Oil prices had reacted with a strong sell on comments from Trump and Pompeo that positive headway was made between the US and Iran yesterday, which was later however refuted by Iran. It is important to keep an eye out for the crude oil stocks later this afternoon. Meanwhile, cryptos continued to decline across the board with NEO leading losses. Bitcoin dropped further heavily and is clinging on to find a bottom at 9,5k after it fell to a flat 9k even overnight.